Business Planning  <ul><li>Planning  anything  requires: </li></ul><ul><ul><li>Goals &  i ncentives </li></ul></ul><ul><ul...
Business Planning - Purpose <ul><li>Route map to achieve your goals </li></ul><ul><li>Sales Document  </li></ul><ul><ul><l...
Business Planning - Goals <ul><li>Goals - “You got to be careful if you don't know where you're going, because you might n...
Business Planning – Time Lines <ul><li>Planning Horizons </li></ul><ul><ul><li>Café 1yr, 2yr, 3yr, 5yr, </li></ul></ul><ul...
Business Planning - Environment <ul><li>No business operates in isolation: </li></ul><ul><ul><li>Economy & Financial Condi...
Business Planning - Resources <ul><ul><li>Raw Materials  </li></ul></ul><ul><ul><li>Business Premises </li></ul></ul><ul><...
Business Planning – Scenario Planning <ul><li>Is one version of the plan enough? </li></ul><ul><ul><li>Never have perfect ...
Business Planning – Milestones & Metrics <ul><li>Measuring  success </li></ul><ul><ul><li>Goals are not milestones – too d...
Business Planning – Plan Outline <ul><li>Executive Summary / Elevator Pitch </li></ul><ul><li>Overall Goals </li></ul><ul>...
Executive Summary / Elevator Pitch <ul><li>Write it last </li></ul><ul><li>Short (2 page max) 'punchy' overview of your bu...
Overall Goals <ul><li>Mission Statement  </li></ul><ul><ul><li>Specific  (but may need to be amended as time passes) </li>...
Business Proposition <ul><li>Business Sector </li></ul><ul><li>Relevant acquired business history (but not personal) </li>...
Marketing Proposition <ul><li>Market Research </li></ul><ul><ul><li>Market size, history, development and current trends <...
Marketing Proposition cont. <ul><li>Marketing Mix – 4 P's </li></ul><ul><li>Product / service </li></ul><ul><li>Pricing </...
Operations Management <ul><li>Premises </li></ul><ul><ul><li>Work from home or business premises – must be realistic </li>...
Finance <ul><li>Sales forecasts </li></ul><ul><li>P&L forecast with Breakeven Analysis & Performance Ratios </li></ul><ul>...
Personnel & Management Team <ul><li>No. of Staff </li></ul><ul><li>Job Descriptions – including Managerial Areas of Respon...
Legalities <ul><li>Company Structure </li></ul><ul><li>Permits & Licenses </li></ul><ul><li>Insurance – Public Liability/P...
Presentation <ul><li>Be smart and adaptable to your audience </li></ul><ul><li>Tips for presenting your plan </li></ul><ul...
Business Planning Better to plan and be wrong, than fail to plan and never be right.
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Business Planning4 Jh 100202

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A beginner's guide to business planning

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Business Planning4 Jh 100202

  1. 1. Business Planning <ul><li>Planning anything requires: </li></ul><ul><ul><li>Goals & i ncentives </li></ul></ul><ul><ul><li>Time h orizons </li></ul></ul><ul><ul><li>Environmental awareness </li></ul></ul><ul><ul><li>Resource estimates </li></ul></ul><ul><ul><li>‘ What if' scenarios </li></ul></ul><ul><ul><li>Milestones & Metrics </li></ul></ul>
  2. 2. Business Planning - Purpose <ul><li>Route map to achieve your goals </li></ul><ul><li>Sales Document </li></ul><ul><ul><li>Persuade & i nvolve others </li></ul></ul><ul><ul><li>Key to selling </li></ul></ul><ul><ul><ul><li>Incentives </li></ul></ul></ul><ul><ul><ul><li>Resolving reservations </li></ul></ul></ul><ul><ul><ul><li>Sales d ocument </li></ul></ul></ul><ul><li>Inform & c ommunicate with a udiences </li></ul><ul><ul><ul><li>Investors / Bank / VC / Family </li></ul></ul></ul><ul><ul><ul><li>Partners </li></ul></ul></ul><ul><ul><ul><li>Employees </li></ul></ul></ul><ul><ul><ul><li>Suppliers </li></ul></ul></ul><ul><ul><ul><li>YOURSELF </li></ul></ul></ul>
  3. 3. Business Planning - Goals <ul><li>Goals - “You got to be careful if you don't know where you're going, because you might not get there.” </li></ul><ul><ul><ul><li>- Yogi Berra, baseball catcher </li></ul></ul></ul><ul><ul><li>Personal Goals </li></ul></ul><ul><ul><ul><li>Lifestyle </li></ul></ul></ul><ul><ul><ul><li>Income </li></ul></ul></ul><ul><ul><ul><li>Recognition </li></ul></ul></ul><ul><ul><li>Business Goals </li></ul></ul><ul><ul><ul><li>Profit </li></ul></ul></ul><ul><ul><ul><li>Invention / Innovation </li></ul></ul></ul><ul><ul><ul><li>Market Share </li></ul></ul></ul><ul><li>Long Term vs Short Term Goals </li></ul>
  4. 4. Business Planning – Time Lines <ul><li>Planning Horizons </li></ul><ul><ul><li>Café 1yr, 2yr, 3yr, 5yr, </li></ul></ul><ul><ul><li>Cable TV franchise up to 25yrs ahead </li></ul></ul><ul><ul><li>Accuracy diminishes with deadline distance </li></ul></ul><ul><ul><li>Be prepared to revise estimates </li></ul></ul>
  5. 5. Business Planning - Environment <ul><li>No business operates in isolation: </li></ul><ul><ul><li>Economy & Financial Conditions </li></ul></ul><ul><ul><li>Industry & Market conditions </li></ul></ul><ul><ul><li>Competitive products / supplies </li></ul></ul><ul><ul><li>Competitor Companies </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><ul><li>Labour market </li></ul></ul><ul><ul><li>Regulatory conditions </li></ul></ul>
  6. 6. Business Planning - Resources <ul><ul><li>Raw Materials </li></ul></ul><ul><ul><li>Business Premises </li></ul></ul><ul><ul><li>Finance / Money </li></ul></ul><ul><ul><li>People </li></ul></ul><ul><ul><li>Equipment </li></ul></ul><ul><ul><li>Time </li></ul></ul>
  7. 7. Business Planning – Scenario Planning <ul><li>Is one version of the plan enough? </li></ul><ul><ul><li>Never have perfect information – rarely 100% accurate </li></ul></ul><ul><ul><li>Prioritize what might be / go wrong </li></ul></ul><ul><ul><li>Make contingency plans </li></ul></ul><ul><ul><li>Recognize trigger points for implementation </li></ul></ul>
  8. 8. Business Planning – Milestones & Metrics <ul><li>Measuring success </li></ul><ul><ul><li>Goals are not milestones – too distant </li></ul></ul><ul><ul><ul><li>Milestone objectives indicate progress on the journey </li></ul></ul></ul><ul><ul><ul><li>Sales targets </li></ul></ul></ul><ul><ul><ul><li>Breakeven profit </li></ul></ul></ul><ul><ul><ul><li>Market share objectives </li></ul></ul></ul><ul><ul><ul><li>Practical targets – prototyping, acquiring premises, equipment </li></ul></ul></ul>
  9. 9. Business Planning – Plan Outline <ul><li>Executive Summary / Elevator Pitch </li></ul><ul><li>Overall Goals </li></ul><ul><li>Sales & Marketing opportunities </li></ul><ul><li>Product / supply description </li></ul><ul><li>Production methods </li></ul><ul><li>Financial returns & requirements </li></ul><ul><li>People / skills </li></ul><ul><li>Legalities </li></ul><ul><li>Exit Strategy </li></ul><ul><li>Appendices / Supporting Documents </li></ul>
  10. 10. Executive Summary / Elevator Pitch <ul><li>Write it last </li></ul><ul><li>Short (2 page max) 'punchy' overview of your business proposition </li></ul><ul><li>Sales pitch to any investors </li></ul><ul><li>Maybe the ONLY part some investors see </li></ul><ul><li>Reason to read remainder of the plan or dismiss it </li></ul><ul><li>Include: </li></ul><ul><ul><li>Basic business proposition </li></ul></ul><ul><ul><li>Outline the marketing logic – including competition </li></ul></ul><ul><ul><li>Detail any 'killer' advantages </li></ul></ul><ul><ul><li>Explain what's in it for investors & how they get out </li></ul></ul><ul><ul><li>How much it will cost them to join (startup costs) </li></ul></ul><ul><ul><li>Be flexible / ready to negotiate where possible </li></ul></ul>
  11. 11. Overall Goals <ul><li>Mission Statement </li></ul><ul><ul><li>Specific (but may need to be amended as time passes) </li></ul></ul><ul><ul><li>Credible </li></ul></ul><ul><li>Company Goals – where you'll be in 5 years </li></ul><ul><li>Identify industry & target market with overview </li></ul><ul><li>Your core strengths & skills important to success </li></ul><ul><li>Financial Expectations </li></ul><ul><li>Significant milestones </li></ul><ul><li>Legal form of proposal – Limited Company, Sole proprietor, Partnership </li></ul>
  12. 12. Business Proposition <ul><li>Business Sector </li></ul><ul><li>Relevant acquired business history (but not personal) </li></ul><ul><li>Progress to date (if you're already trading) </li></ul><ul><li>Vision for the future </li></ul><ul><li>Products or services </li></ul><ul><ul><li>Identify features, advantages & benefits (no-loss suction vacuum) </li></ul></ul><ul><ul><li>Identify any USP's (unique features) </li></ul></ul><ul><ul><li>Future development plans (Dyson air blade drier) </li></ul></ul><ul><ul><li>Competitive advantages including patents, trade marks etc </li></ul></ul><ul><ul><li>Key features of your industry or sector </li></ul></ul><ul><ul><ul><li>For example – importance of consumables (printers) </li></ul></ul></ul><ul><ul><ul><li>Changing technologies (film) </li></ul></ul></ul>
  13. 13. Marketing Proposition <ul><li>Market Research </li></ul><ul><ul><li>Market size, history, development and current trends </li></ul></ul><ul><ul><li>Target customers – characteristics, demographics & needs </li></ul></ul><ul><li>Competition & SWOT Analysis </li></ul><ul><ul><li>Identify competitors by name if possible </li></ul></ul><ul><ul><li>Their strengths & weaknesses vs yours </li></ul></ul><ul><ul><li>Target market shares – zero sum game? </li></ul></ul><ul><ul><li>Anticipated reactions to your entry & your plans </li></ul></ul><ul><ul><li>Barriers to entry for you & others </li></ul></ul>
  14. 14. Marketing Proposition cont. <ul><li>Marketing Mix – 4 P's </li></ul><ul><li>Product / service </li></ul><ul><li>Pricing </li></ul><ul><li>Promotion </li></ul><ul><li>Place </li></ul><ul><li>Sales Targets – Range including best & worst </li></ul>
  15. 15. Operations Management <ul><li>Premises </li></ul><ul><ul><li>Work from home or business premises – must be realistic </li></ul></ul><ul><ul><li>Property commitments, share, rent, lease & personal guarantees </li></ul></ul><ul><li>Production facilities </li></ul><ul><ul><li>In house production vs outsourcing - investment required </li></ul></ul><ul><ul><li>Capacity now and future </li></ul></ul><ul><ul><li>Patented processes </li></ul></ul><ul><ul><li>Suppliers / special arrangements / credit policies & guarantees </li></ul></ul><ul><li>Management-information system </li></ul><ul><ul><li>Communications, phone, fax, email, mobiles </li></ul></ul><ul><ul><li>Account systems & stock control, </li></ul></ul><ul><ul><li>Process & Quality control? </li></ul></ul>
  16. 16. Finance <ul><li>Sales forecasts </li></ul><ul><li>P&L forecast with Breakeven Analysis & Performance Ratios </li></ul><ul><li>Cashflow forecast </li></ul><ul><li>Balance sheet forecast </li></ul><ul><li>Funding requirements </li></ul><ul><li>Security & Collateral </li></ul><ul><li>'What if' scenarios & Contingencies </li></ul>
  17. 17. Personnel & Management Team <ul><li>No. of Staff </li></ul><ul><li>Job Descriptions – including Managerial Areas of Responsibility </li></ul><ul><li>Skills & Training </li></ul><ul><li>Experience </li></ul><ul><li>Pay structures / reward plans / Commissions </li></ul><ul><li>External Resources / Professional Advisors / Bankers / Mentors </li></ul><ul><li>Safe hands </li></ul>
  18. 18. Legalities <ul><li>Company Structure </li></ul><ul><li>Permits & Licenses </li></ul><ul><li>Insurance – Public Liability/Professional Indemnity </li></ul><ul><li>Contracts </li></ul>
  19. 19. Presentation <ul><li>Be smart and adaptable to your audience </li></ul><ul><li>Tips for presenting your plan </li></ul><ul><ul><li>Spiral bound A4 in size </li></ul></ul><ul><ul><li>Cover with name, address and contact details of author </li></ul></ul><ul><ul><li>Contents page with page and section numbering </li></ul></ul><ul><ul><li>Make sure you can produce editable and non-editable (pdf) version </li></ul></ul><ul><ul><li>You may want to email it, so ensure you use email-friendly formatting </li></ul></ul><ul><ul><li>Edit, re-edit and edit again </li></ul></ul><ul><ul><li>Get others to read it, including expert advisors </li></ul></ul><ul><ul><li>USE A SPELL CHECKER </li></ul></ul><ul><ul><li>Avoid jargon </li></ul></ul><ul><ul><li>Use appendices for detailed info that must be included </li></ul></ul>
  20. 20. Business Planning Better to plan and be wrong, than fail to plan and never be right.

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